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Debt Limit Threat In Washington

CD_Guy
  |     |   2 posts since 2019

If Congress does not raise the debt limit,

will my U.S. Treasuries become worthless?

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3


Answers
sams1985
  |     |   781 posts since 2022
Not worthless, but i bet it would just delay the dividend payout. Same goes for the people invested in MMF's which have invested in US securities.
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3
PHart
  |     |   17 posts since 2022
I agree generally, but they would be worth less (not worthless) if you try to sell them. And it is unclear to my mind what (if anything) you would be paid for the payment delay. For example, for each day of delay, would you be paid interest on interest at all and, if so, would you pay interest on interest at the stated fixed rate (which may be lower than current rates) or would you be paid interest on interest at the current fed funds rate. That is part of why this is so dangerous - these were priced as a risk free investment, not as a bond with a unilateral issuer option to delay interest or maturity payments
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2
Ally6770
  |     |   4,294 posts since 2010
Janet Yellon said she could borrow from different accounts until June before a default would happen. She said bond holders, SS and Medicare and I believe the vets would be paid. Didn't read about the house members that are holding everything back if their salaries would be paid. This is not for future spending only to pay the bills on accounts that congress has already obligated and passed.
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3
betaguy
  |     |   180 posts since 2022
"If Congress does not raise the debt limit,
will my U.S. Treasuries become worthless?"

no.
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1
Choice
  |     |   937 posts since 2020
Court of Claims if you’re concerned…what does the Constitution say?  If lawful expenditure who can say, constitutionally, a statute that trumps the Constitution?
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1
JWARREN
  |     |   69 posts since 2017
No! Potentially a very dangerous ploy. Payment of money that would go into the G-Fund (government employee pensions) will be deferred first. They apparently have until June to raise the debt limit. Hopefully, it will be more smoke than fire.
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1
Ally6770
  |     |   4,294 posts since 2010
The fiscal year was over the end of Sept 2022. They keep just extending the time line and not agreeing for a budget. Even waiting until June if it isn't settled by Thursday and not extended again the credit rating of the US, the bills not being paid and inflation and the cost of things would be affected. Just like a family didn't pay their mtg and they cried foul when they were foreclosed.
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